How to choose a mortgage and not overpay the bank

The total cost of credit (PSK) is an indicator that includes every payment on the loan: interest, fees, insurance, mandatory payments to third parties. By Kazakh law, banks must state it in the contract. Compare PSK across banks — the difference from the advertised rate can be 2–5 percentage points.

Ask each bank for the full repayment schedule (amortisation schedule). Add up all the payments over the full term and subtract the loan amount. That is your real overpayment. On a KZT 30 m loan at 12% for 15 years the overpayment is about KZT 32 m — you give the bank more than the flat cost.

Some banks charge a one-off origination fee: 0.5–2% of the loan. On KZT 30 m that is KZT 150,000–600,000 up front. 'A rate of 10% with no fee' is often better than 'a rate of 9% with a 1% fee'.

The rate does not change for the whole term, even if the National Bank of Kazakhstan policy rate rises. You know the monthly payment exactly — that simplifies budgeting years ahead. A fixed rate is usually a little higher than a floating one: you pay a 'certainty premium'.

A floating rate is linked to the NBK base rate plus a fixed bank margin. If the NBK rate rises by 3%, your payment can rise by 15–25%. Take a floating rate only if you understand that risk and have an income buffer to absorb it.

Some banks offer a fixed rate for the first 3–5 years, then floating. It can look attractive, but important to understand: in those early years most of the payment goes to interest, and if the rate then rises, refinancing may not be worthwhile.

Insuring the collateral (the flat itself) against physical damage is a legal requirement for a mortgage. Cost: roughly 0.1–0.3% of the flat's value per year. You may choose the insurer yourself — you are not obliged to use a company affiliated with the bank, which is usually more expensive.

The bank cannot impose life insurance as mandatory, but without it they often offer a rate 0.5–2% higher. Do the maths: if the saving from a lower rate exceeds the policy cost, insuring is better.

Job-loss insurance and extended 'legal packages' added at loan disbursement are often sold. Read what is actually covered. If the payout conditions are tight or the coverage amount is symbolic, decline and save.

Some banks forbid early repayment in the first 6–12 months or charge a penalty. Ask about this before signing. If you plan to pay down faster, this clause must be penalty-free. Even small early payments disproportionately reduce the overpayment on a long-term loan.

On a partial early repayment, banks usually offer two options: shorten the term (same payment) or reduce the monthly payment (same term). Shortening the term saves significantly more on interest. Reducing the payment is better if your income is unstable.